Anyone doubting the scale of those ambitions should take note of his assessment of Turkey’s place in the world.

Turkey’s geopolitical position, Davutoğlu says, “has to be seen as a means of gradually opening up to the world and transforming regional into global influence…. Turkey is both a European and Asian, Balkan and Caucasus, Middle Eastern and Mediterranean country”.

Turkey has already invested millions of euros across the Balkans – concentrating largely on telecoms, transport infrastructure and the banking sectors.

During his first official visit to Pristina in November this year, Tayip Erdogan, Turkey’s prime minister, was careful to highlight that trade between the two countries had almost doubled in the past two years, rising from US $120m (90.8 m euro) in 2008 to $210m (158.9m euro) in 2009.

Erdogan also underlined that Turkish companies are increasingly involved in transport projects and telecommunications in Kosovo, adding his country stood ready to take the next steps toward ensuring the “stability of the region and the Balkans”.

Dominance of Balkan markets

“Turkey is definitely interested to invest in strategic sectors in the Balkans, such as telecom and airport facilities. This is part of their economic strategy, in order to dominate key economic sectors in the Balkans”, says Fadi Hakura, an expert on Turkey’s EU accession bid and a fellow at the London-based think tank Chatham House.

Turkish Balkan Investment – At a glance

Albania

• Turkey is now the third-largest investor, after Italy and Greece, according to the Turkish foreign ministry.

• About 80 Turkish companies are already operating in Albania.

• Turkish company Calik has made the most significant investments, including interests in Albtelecom, the nation’s telephone and internet provider, Eagle Mobile, and the country’s second biggest bank, BKT.

Bosnia

• Turkey is the fourth-largest investor in Bosnia, behind Austria, Slovenia and Germany.

• In late 2008, Turkey bought 49 percent of Bosnia’s national carrier, BiH Airlines. Turkey and Bosnia have also signed several bilateral agreements.

The total amount of Turkish investment from May 1994 to December 2009 is estimated at 115m euros ($151.9m), according to the Foreign Investment Promotion Agency of Bosnia and Herzegovina.

Kosovo

• Trade between Ankara and Pristina has almost doubled in the past two years, rising from US $120m (90.8 m euro) in 2008 to $210m (158.9m euro) in 2009.

• Key investments include the contract to run the capital’s international airport for 20 years, the building on a key highway linking Kosovo to Serbia and Albania, and various interests in the banking, insurance and education sectors.

Macedonia

• Turkish investment in Macedonia has risen sharply in the last five years, says Fatmir Besimi, the economy minister.

• Key contracts include the running of two airports – Skopje and Ohrid – for the next 20 years, on condition of investing 200m euros ($264.2m) in the country’s airport infrastructure.

• Besimi believes that Turkish investments in Macedonia will grow in the future, even though the largest investments in Macedonia come from EU.

Serbia

• Ankara and Belgrade sign a free trade agreement in 2010

• Three major Turkish construction firms will build part of the planned 445km highway stretching from Belgrade to Bar in neighbouring Montenegro.

• Ankara has chosen to invest heavily in the troubled, majority-Muslim Sandzak region, causing consternation among some non-Muslim Serbs.

Ankara has already made key purchases across the region. In May this year, Turkish firm LIMAK was awarded the contract to run Pristina’s International Airport for 20 years. LIMAK has promised to invest US $106 m (80 million euros) in airport infrastructure as part of the deal.

Also this year, the Turkish-American consortium, Enka and Bechtel, won a tender worth around $924.8m (700m euro) for the construction of a new highway which will connect Kosovo with Albania and Serbia.

Turkish companies are now vying for key stakes in the privatisation of two of Pristina’s largest public companies: Kosovo Energy Corporation and Post and Telecommunications of Kosovo.

Turkish investors’ interest in Balkan countries began to climb during the nineties, and investments have continued to steadily increase since then.

While Macedonia and Bulgaria attracted considerable Turkish interest before 2000, more than half of the total amount of Turkish investment in Albania, Bosnia-Herzegovina, Kosovo and Serbia has been realized since 2005.

According to Turkey’s treasury department, the most important direct investment destination for Turkish investors in the Balkans is Bosnia-Herzegovina. The least preferred country is Serbia.

Turkey is the fourth-largest investor in Bosnia, behind Austria, Slovenia, and Germany. In late 2008, Turkey bought 49 percent of Bosnia’s national carrier, BiH Airlines. Turkey and Bosnia have also signed several bilateral agreements.

Serbia ‘key to regional security’

Despite low levels of investment from Ankara, Turkish officials stress that Serbia is really the country of crucial importance in the Balkans.

Suha Umar, who was the Turkish ambassador to Belgrade until September 2010, explains that Belgrade is the key to security in the entire region.

“If we are after peace and stability, without Serbia truly seeking peace and stability, it won’t happen. If we are looking for trouble, without Serbia it is very difficult to create trouble. This is why Serbia is the key country and Turkey has realized this fact,” he says.

Ankara and Belgrade signed a free trade agreement that came into force in September this year, opening Serbia to Turkish investors and paving the way for visa-free travel for nationals of both countries.

“Turkish businessmen are very interested in Serbia,” says Umar, pointing to the three giant Turkish construction firms – Kolin, Makwol and Juksel – who have just signed agreements to build part of the planned 445km highway stretching from Belgrade via Sandzak to Bar in neighbouring Montenegro.

Ankara has chosen to invest heavily in the troubled, majority-Muslim Sandzak region that lies across southwest Serbia and borders Bosnia, Montenegro and Kosovo. Sandzak has strong links with Turkey, as many residents have relatives who emigrated during the 1912 and 1913 Balkans wars, as the Ottoman Empire began to decline.

This has irked some non-Muslims in Serbia. Professor Darko Tanaskovic, an expert in Oriental studies at the University of Belgrade and one-time Serbian ambassador to Ankara, sees Turkey’s interest in Serbia as decidedly pro-Muslim.

“Serbia isn’t Turkey’s privileged partner in the region. That position is reserved for Bosnia and Herzegovina and Albania, as well as for Muslim communities in other Balkan states, which are a permanent base and source of regional Turkish influence,” he says.

Ilir Deda, ex-executive director for the Kosovar Institute for Policy Research and Development-KIPRED, sees other problems with Turkey’s re-emergence as a key player in Kosovo.

French and German companies are leaving the country, while Kosovo's main assets are given to Turkey, says Deda.

Go East or West?

“So the first question that arises from these circumstances is which direction is Kosovo going? Is it going straight to Asia, or to Europe?” he asks.

He is afraid that Kosovo is losing European friends and, he says, this means that Kosovo's criteria for membership of the EU will be extremely tough.

“There is nothing bad about Turkish interest in investing in Kosovo, but the decisions taken in Kosovo must take account [and further] Kosovo’s ambition to join the EU”, he stresses.

Abdulla Hamiti, head of Oriental studies at the University of Pristina, disagrees with Deda, claiming that the free market does not recognize ideology or politics.

He thinks this rapprochement with Turkey should not be regarded as a step away from Europe, because one of Ankara’s own key objectives is accession to the EU.

Hamiti warns that while Turkey has enormous economic might, Kosovo should not be ‘intimidated’ by large scale investment by Turkish companies.

Despite high levels of Turkish investment in, and religious and cultural ties to, Bosnia, Albania and Kosovo, Chatham House’s Hakura believes that Turkey is more interested in bigger markets, such as Romania and Bulgaria.

“The biggest trading partner for Turkey in the Balkans is Romania. Bosnia and Kosovo are very, very small markets for Turkish exports”, he says.

Overall, Hakura explains, the major Turkish investments are focused in the Middle East.

“Turkish overall trade with the Middle East is worth 23.4bn euro (US $31bn), much higher than with the Balkan countries,” Hakura says.

EU ‘biggest player in the region’

Turkish exports to the Balkans

According to the Turkish Statistical Institute, Turkey’s total export volume to Balkan countries, including Greece, Romania, Bulgaria, Albania, Croatia, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro and Serbia was estimated at US $10.8bn (approx 8.17 bn euros) for 2008.

Following the global economic crisis, total exports to these countries dropped to over US $6.9 billion (5.22 bn euro) last year.

In the first half of 2010, Turkey exported US $3.4 billion (2.57bn euro) worth of products to Balkan countries.

Hakura agrees that Turkey wants to be a big player in the Balkans but stresses the EU is, and will remain, the biggest economic player in the region, rather than Ankara.

“The European Union integration process is still the number one priority for the Balkans. These are political and economic limitations that will stop Turkey from taking the position as lead investor in the region,” says Hakura.

Turkey applied for the first time for EU membership in 1987. Ankara’s attempt to join has been repeatedly rejected by some EU member states for varying reasons, and is currently stalled.

While some have argued that Turkey’s interest in the Balkans, and other regions, merely reflects Ankara’s attempt to create an alternative to EU membership, others believe that Turkey is simply building on its existing ties to the region.

Lumir Abdixhiku, executive director of the Institute for Development Research, Riinvest, in Pristina, believes that Ankara is shoring up its existing interests in the region.

He points out that Turkish businesses also export significant amounts of goods to the region – largely because they have a good understanding of the local economic climate.

Abdixhiku stresses that cheaper Turkish products have been available for a long time in the Balkans and they are popular with local consumers because they are more affordable.

“Balkan countries are emerging markets with lots of opportunities, and Turkey is currently well positioned [to take advantage of that],” he says.

He says Turkey has also been able to step in as Greek investment in the region drops, as Athens struggles to balance its books following the global economic downturn. In 2009, the Greek budget deficit stood at 15.4 per cent of GDP.

While Turkey’s economic and political influence is, without doubt, growing across the Balkans, EU membership is the central aim for both.

A report published by the European Stability Initiative, an independent non-profit research institute, in November this year, likened relations between Turkey and the EU to a Catholic marriage. That is, divorce is not an option.

The report authors predict that even if Turkey has not joined the EU 10 years from now, the accession process will be ongoing. The only question then is whether the couple will be happy, or not.

As Balkan states adjust, or gear up, for EU membership, the very same question could be asked about renewed relations between Turkey and its former Ottoman-era territories.

Aleksandra Stankovic, a Belgrade-based journalist, contributed to this article

Meet the Journalists

Altin Raxhimi from Tirana, Albania, is an experienced journalist currently working freelance from Albania for a host of English-language publications, including BIRN, www.reportingproject.net, Inter-Press Service and The Chicago Tribune

Gjergj Erebara was born in 1979 in Tirana, Albania. He has been specialized in economic reporting and currently works as journalist in “Shqip” daily published in Tirana and BalkanInsight.com publication.

Yana Buhrer Tavanier is a freelance journalist and a human rights activist based in Sofia, Bulgaria. Previously she was editor of weekly Capital, and worked as a journalist for Tema magazine and daily Dnevnik.

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